Chapter-6Residential-Financial-An(内含中文笔记).pptVIP

Computing incremental cost Loan amount Monthly Pmt #1 $90,000 1,015.05 #2 $80,000 842.58 #1-#2 $10,000 172.47 What is the interest rate on the $10,000 if the additional monthly payment is 172.47 for 300 months? 算出两个贷款的不同，PV,PMT，求出此收益率 Pricing loan of higher LTV ratio A house costs $100,000 can be financed with two loans: 1st loan: $80,000, 25 yr, 12% 2nd loan: $10,000, 25yr, 18% Alternatively, the borrower can borrow one loan in the amount of $90,000. What should the interest rate be on the $90,000, 25yr loan so that the borrower will be indifferent between the two alternatives? Pricing loan of higher LTV ratio Amount Monthly Payment 1st loan: $80,000 842.58 2nd loan: $10,000 151.74 Total: $90,000 994.33 What should the interest rate be on the $90,000, 25yr loan with monthly payment of 994.33? Example 6-3, answer: 12.69% The proper interest rate on 90% LTV loan should be 12.69% for the borrower to be indifferent. Note: The answer also depends on the expected pay-off date and the fees and points charged by the lender. 两个贷款求出PMT，之后用9000来求出利率，就可以得出90%需要的利率 ，抵借价值比率与增量借款成本的关系？？ To compare benefit vs. cost To compute the present value of the monthly interest savings during the 25 yrs, discount rate at 14% $5,056.39 $4,104.53 Benefit from the new loan (interest savings) is larger than the cost of refinancing. Whether we compare the benefit with cost in refinancing, or yield on investing in refinancing, or the effective cost of refinancing, we arrive at the same conclusion. Benefit cost, refinance ; Yield on investing current market interest rate (of the new loan), refinance; Effective cost of refinancing the rate of the old loan, refinance. It depends on whether or not the $74,443 (loan balance) available to repay the loan at the end of year 5 may be reinvested elsewhere. If the borrower can reinvest at a yield greater